This is why a lender for a house purchase requires title insurance. The insurance kicks in to make you whole if it turns out the house was not the prior owner's

This is why a lender for a house purchase requires title insurance. The insurance kicks in to make you whole if it turns out the house was not the prior owner's to sell. I don't think the same things exists with cars, but requiring it in some way seems like a way to handle the problem in general. In state-level social fund equivalent. This happens with insurance too. One of the costs baked into premiums are state mandated contributions to common insurance solvency pools. If a carrier goes out of business, the insured is still covered by the common pool that is used to fund claims (that have now be transferred to a solvent firm or trustee).